What is Fedwire?

Fedwire stands for Federal Reserve Wire Network.  It is a high-speed electronic communications network that links the Federal Reserve Board of Governors, the 12 Federal Reserve Banks and the 24 branches, the U.S. Treasury Department, and other federal agencies.

What does a Fedwire look like?

A Fedwire is an electronic transmission.  One can only look at a print-out of the actual transmission.  The transmission contains inter-bank codes that are changed continually, a reference number, the names of the sending and receiving banks, the transfer amount, and the name and account number of the sending account holder and the receiving account holder.  And that's all.  The crediting and debiting of Federal Reserve accounts is understood.  It is not a required part of the transmission.  There are no instructions, no conditions, no words at all that are not part of an account name or bank address.  Unless you are on the sending or receiving end of Fedwire funds and want to verify the transmission for some reason, the print-out is not very interesting. 

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What Fedwire is used for

Fedwire is used for

	Large dollar time-sensitive payments
	Funds transfers between reserve banks
	Purchases or sales of Federal Funds transfers between correspondent banks
	Sales of book-entry U.S. Government securities
	Collection of tax and loan accounts in commercial banks
	Funds disbursement

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Who has access to Fedwire?

1. Federal Reserve Member banks

2. Financial institutions that have depository accounts with the Federal Reserve

3. Foreign banks located in the U.S.

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Fedwire Funds Transfers
 The Fedwire funds transfer system is a real-time gross settlement system in which more than 9,000 depository institutions initiate funds transfers that are immediate, final, and irrevocable when processed.  Depository institutions that maintain a reserve or clearing account with a Federal Reserve Bank may use Fedwire to send payments to, or receive payments from, other account holders directly. Depository institutions use Fedwire to handle large-value, time-critical payments, such as payments for the settlement of inter-bank purchases and sales of federal funds; the purchase, sale, and financing of securities transactions; the disbursement or repayment of loans; and the settlement of real estate transactions.  http://www.federalreserve.gov/PaymentSystems/FedWire/ par. 4.

The Fedwire funds transfer system operates from 12:30 a.m. to 6:30 p.m. eastern time, Monday through Friday. The deadline for initiating third-party transfers (that is, transfers initiated by a depository institution on behalf of its customers) is 6:00 p.m. eastern time.

(For more information, see Fed Point 43: Fedwire, the Fedwire Directory. and Fedwire and Net Settlement)

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